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Do not have the trade-in applied against the cap cost if Tesla will allow it. Instead, have them issue a check to you for the trade-in. My reasoning is that if the car is totaled, particularly in the early part of the lease, the insurance company will pay Tesla and you lose the amount of the trade-in. When you go to replace the car you will have lost the trade-in. For the same reason, it is not a good idea to pay additional money up front on a lease. In states like NJ, where there is no sales tax on EV's, you do not lose the benefit of reducing the cost with a trade-in.
I had not considered this angle. This really upsets by my current lease plan using a large down payment to lower costs. This seems a bit odd though as the liability of the totaled car should be mine and I should be compensated.
I would expect that in such a scenario, Tesla would provide me with a replacement car for the remaining period of the lease without any additional payment. So in other words, it should make no difference in terms of the financial implications.
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Notwithstanding other comments you CAN negotiate on money factor, but that is it. Residuals are as established with no change possible. Basically if your bureau FICO score is above 790 or so you might get a break on money factor. There seems to be no hard and fast rule but it is very hard to negotiate with the Tesla F&I people even though F&I they are.
I had a chance to speak to a couple of experts on the topic of down payment for the lease and the scenario of a totaled car.
First things first: The downpayment has no bearing on the insurance payment which would be purely driven by the assessed value of the car at the time of the incident. So if this value happens to be greater than the lease payoff, the lessor gets the difference. If it is less than the lease payoff amount at the time of the incident then the lessor will owe the difference to Tesla.
Since Tesla leases come with GAP insurance, the latter scenario will not happen as the difference will be covered by the GAP insurance. I must say that the first scenario (insurance payoff being higher than the lease payoff) is also quite unlikely under a standard CAP reduction ($5K) but could be a possibility if there was a significant downpayment and the incident takes place in the earlier part of the lease. Also please lot note that Tesla does not allow a CAP reduction of higher than the 25% of the total sales price.
The bottomline is that since the upside scenario is covered by the GAP insurance, there is no incentive to make a higher down payment beyond reducing the financing costs. (currently equivalent of ~4.0% APR over the lease term)
As for me, I plan to lease my Model X as for me it is a gadget that will be replaced by something better in 3 years and I will be driving something else. I did calculations for 10Kmi/yr lease and the lease versus loan calculation is a wash.
First things first: The downpayment has no bearing on the insurance payment which would be purely driven by the assessed value of the car at the time of the incident. So if this value happens to be greater than the lease payoff, the lessor gets the difference. If it is less than the lease payoff amount at the time of the incident then the lessor will owe the difference to Tesla.
Since Tesla leases come with GAP insurance, the latter scenario will not happen as the difference will be covered by the GAP insurance. I must say that the first scenario (insurance payoff being higher than the lease payoff) is also quite unlikely under a standard CAP reduction ($5K) but could be a possibility if there was a significant downpayment and the incident takes place in the earlier part of the lease. Also please lot note that Tesla does not allow a CAP reduction of higher than the 25% of the total sales price.
The bottomline is that since the upside scenario is covered by the GAP insurance, there is no incentive to make a higher down payment beyond reducing the financing costs. (currently equivalent of ~4.0% APR over the lease term)
As for me, I plan to lease my Model X as for me it is a gadget that will be replaced by something better in 3 years and I will be driving something else. I did calculations for 10Kmi/yr lease and the lease versus loan calculation is a wash.
DuplexDianne
Member
Please tell me more about Sec 179 credits if I am a small business owner. Are these deductions above and beyond vehicle maintenance and mileage calculations?
engle
Member
See my post for details on the "Happiness Guarantee": (including a sample copy of it)
FYI: Tesla Leasing Program "Happiness Guarantee"
Merrill
Merrill
Can someone tell me what happens to the $7500 FTC when you lease, I looked and nothing is very clear on this. I would lease thru Tesla.
On a side note, those of you that are on your second Tesla, does Tesla forgive (some if not all) excess mileage on your current lease if you decide to get another Tesla? I've done with with other manufacturers, but don't know Tesla stance on this.
Merrill
Merrill
engle
Member
Yes, that is exactly correct. I should add for my fellow California residents that when you lease, you still qualify for the $2,500 California rebate if your income qualifies.
The US Bank money factor converts to 4% interest which is terrible, but I leased anyway because I have an early build and can write off much of the payments as a business vehicle. It also avoids the inevitable technological obsolescence. I wouldn't keep it if fully autonomous driving is available in 36 months, for example.
I guess the strategy for someone who wants to keep their leased vehicle after 36 months would be to return it and buy the same one back as a CPO, depending on the CPO rates at that time for X's with similar configs and mileage... That also gives you another 4-year, 50,000 mile limited warranty which I can see being of great value for the X.
engle
Member
When I asked back in December it was just the 36-month with choice of 10K, 12K or 15K miles/year with $0.25/mile + sales tax for anything over that.
You might want to check to see if that's changed. To compete with the ICEmakers, they should also offer a 24 and 48, IMHO, at minimum. I definitely would have leased mine for 48 months.
The actual leases are through US Bank. Tesla Finance does the paperwork and then assigns them over so US Bank owns the vehicle and services the lease. You have to FAX in a form with copy of a voided check to set up autopay. Even if you don't have another account with US Bank, you can use their website for your lease, which I just had to do today to make my first monthly ACH payment since autopay won't begin until May.
Merrill
Merrill
I have always purchased my cars, but with the Model X I'm tossing around leasing. I cannot use the 7500 FTC still have a solar credit for the next few years and although I usually keep my cars with the Tesla 3 years from now we will have a different vehicle. Also might protect me from mechanical issues down the road, I would probably get another Tesla in 3 years. Not sure what the depreciation in 3 years would be but probably close to what I would pay on the lease. So any input from this forum would be appreciated.
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